Greek and European Crisis: The Key Milestones

From the first Greek bailout until the upcoming EU summit, there were some important touchpoints for the protracted governmental debt crisis in Europe’s 17-nation euro currency bloc. We have summarized them below:

February 2, 2010: Greek Prime Minister George Papandreou proposes new measures to freeze civil service salaries and raise fuel taxes and retirement ages. He urges Greek lawmakers to support the plan, saying it is needed to pull the country back from the edge of a financial cliff. Some investors believe Athens may need a bailout from other European Union nations or the International Monetary Fund to avoid a default. EU officials dismiss the need for a Greek bailout, saying Athens is capable of solving the crisis by itself.

February 15, 2010: European finance ministers warn Greece it may need to take drastic action and that pledges to cut government spending and raise money do not go far enough. EU ministers give Greece until mid-March to show it can make substantial progress.

March 3, 2010: The Greek Cabinet approves broad new spending cuts designed to save an extra $6.5 billion. The measures include a sales tax increase, a freeze in pensions and additional salary cuts for government workers.

March 7, 2010: French President Nicolas Sarkozy promises eurozone nations will not let Greece fail. Sarkozy says the 16 countries then using the euro as their currency are working on specific steps to help Greece.

March 8, 2010: Portugal announces a series of austerity measures intended to cut the nation’s budget deficit by 2013. The plan includes delaying a high-speed rail project, cutting military spending, paring social spending and raising some taxes. It also calls for limits on public sector wage increases.

March 11, 2010: About 30,000 people march through Athens in a new wave of protests against civil service pay cuts and a freeze on pensions. Near Athens University, some of the clashes turn violent as protesters hurl rocks and petrol bombs.

March 24, 2010: EU ministers fail to agree on how to help the struggling Greek economy as the value of the euro plunges to a 10-month low against the dollar. Meanwhile, the Fitch ratings agency lowers its credit rating for another eurozone nation, Portugal, because of worries that county will be unable to pay back its loans.

April 26-27, 2010: Ratings agency Standard and Poor’s cuts Greek long-term government bonds three levels to speculative or “junk” status. It also downgrades Portugal’s sovereign debt by two notches. SP says it has growing concerns about the ability of the Greek and Portuguese governments to repay debts.

May 2, 2010: EU finance ministers unveil a $146 billion EU-International Monetary Fund rescue package for Greece. German Chancellor Angela Merkel says it is the only way to ensure the stability of the euro. The announcement comes the day after thousands of protesters rally in Athens against the government’s plan to make deep budget cuts.

May 7, 2010: The IMF gives final approval to a $40 billion bailout for Greece, part of the larger $146 billion rescue package that has already been approved. IMF managing Director Dominique Strauss-Kahn says the Greek government should be commended for “well-balanced” efforts to bring the country out of its financial crisis.

May 27, 2010: Spain’s parliament approves an $18 billion package in spending cuts, including wage cuts for civil servants, by a one-vote margin. Two days later, Fitch cuts Spain’s credit rating one notch, warning that a strict austerity plan intended to cut debt could also slow economic growth.

June 14, 2010: Moody’s Investors Service downgrades Greece’s bond ratings to “junk” status because of concerns the country could fail to cut its deficit and pay down its debt.

November 27, 2010: Tens of thousands of protesters mass in Dublin to protest the Irish government’s plan to cut social welfare programs and raise taxes. The cuts are needed to secure a $113 billion international bailout for the debt-plagued nation. European Union governments approve the bailout package the following day.

March 24, 2011: Thousands of demonstrators confront police in Brussels, where a European Union summit tries to deal with the debt crisis. Belgian police fire tear gas and water cannons at nearly 20,000 protesters.

May 3, 2011: Portugal becomes the third European Union nation to take a bailout, accepting a $116 billion package from the EU and the IMF.

May, 12, 2011: The IMF warns debt problems in Greece, Ireland and Portugal could spread to other eurozone nations and to the emerging economies in eastern Europe.

May 19, 2011: Thousands of protestors frustrated with Spain’s high unemployment rate gather in major Spanish cities to demand that Madrid provide them with jobs. Spain’s jobless rate is more than 21 percent.

June 29, 2011: The Greek parliament approves sweeping new austerity measures – voting for $40 billion in tax hikes and spending cuts. The plan also calls for the sale of state-owned assets. Lawmakers vote for the plan as thousands of rock-throwing protesters clash with police in central Athens.

July 22, 2011: The EU and the IMF agree to give Greece another bailout worth about $155 billion. Greece will also get voluntary loans from the private sector to help cover the financial gap.

August 12, 2011: Italy unveils sharp budget cuts – about $28 billion in 2012 and $35 billion in 2013. The European Central Bank had demanded the cuts in exchange for supporting Italy’s bonds. Interest rates on those bonds soared a week earlier, increasing investor fears that Italy also could be forced to seek a bailout.

October 19, 2011: An estimated 70,000 people march on the Greek parliament, some clashing with police while a massive protest and general strike paralyzes Athens. Public and private sector unions slam the government’s plans to slash the salaries of public workers and raise taxes.

November 1, 2011: World stock markets plummet after Greek Prime Minister George Papandreou says he will call for a referendum on further austerity measures needed to secure additional bailout funds. One Greek survey shows 60 percent of those questioned took a negative view of the Brussels debt-relief agreement. Some European leaders and financial analysts say a Greek vote against the debt-relief agreement would amount to Greece’s departure from the eurozone and could lead to new turmoil on world financial markets.

November 2, 2011: French President Nicolas Sarkozy and German Chancellor Angela Merkel say Greece will receive no more European bailout aid until it fulfills its commitments to the eurozone.

November 3, 2011: Greek Prime Minister George Papandreou scraps a possible referendum on acceptance of the European bailout package. Meanwhile, the European Central Bank unexpectedly cuts its key interest rate by a quarter percentage point to 1.25 percent. Still later, it cuts the rate to 1 percent as the eurozone economy contracts further.

November 6, 2011: Greek Prime Minister George Papandreou agrees to step down in favor of a short-term coalition government whose primary task will be reaching agreement on a new EU bailout deal.

November 8, 2011: Italian Prime Minister Silvio Berlusconi says he will resign as soon as parliament passes crucial economic reforms. He makes the announcement after he loses his parliamentary majority during a vote on a routine budget measure in the lower house. Italy is the third largest economy in the eurozone and the seventh largest in the world. But it faces potential economic crisis caused by its ballooning public debt.

December 9, 2011: Eurozone leaders decide to adopt new budget restraints for spending by individual governments.

January 2012: Credit rating agency Standard Poor’s downgrades France and eight other eurozone governments, and a few days later the currency bloc’s rescue fund, for their failure to resolve the debt crisis.

January 2012: Of the 27 EU countries, all but Britain and the Czech Republic agree to the new rules tightening budget controls.

February 10, 2012: Greece agrees to new austerity measures demanded by its international creditors.

March 13, 2012: Eurozone officials agree to a new $162 billion bailout for Greece.

May 6, 2012: Greeks vote for parties opposed to the bailout and the austerity demanded by the country’s lenders. But within days, new elections are called for June 17 after the country’s fractious political parties are unable to form a new coalition government.

June 9, 2012: Spain says it will seek a $125 billion rescue deal from the eurozone for its ailing banks burdened with defaulted real estate loans. Meanwhile, in the ensuing days, the Spanish government’s borrowing costs reach new heights, pushed to the level at which Greece, Ireland and Portugal were forced to secure international bailouts.

June 17, 2012: In the second round of parliamentary voting, Greek voters favor the pro-bailout, conservative New Democracy party led by Antonis Samaras. A few days later, he forms a new coalition government.

June 28-29, 2012: European Union leaders, meeting in Brussels, are scheduled to hold their 20th summit on the debt crisis.